Training Propels Simulation Company

FORECAST 2004: TECHNOLOGY/DEFENSE

Ecs Is Poised For A Banner Year As It Finds Its Footing In A Difficult Business.

January 12, 2004|By Christopher Boyd, Sentinel Staff Writer

Engineering and Computer Simulations Inc. doesn't fit snuggly in the defense-industry mold. It is neither large nor well-connected, and its products don't attract billion-dollar contracts.

But the tiny Orlando simulation company's training programs have captured serious interest in the Pentagon, and after six years, ECS is finally finding a niche in a difficult business.

The company expects a good year as the military absorbs the lessons it learned during the campaigns in Iraq and Afghanistan. With ECS' emphasis on high-tech weaponry and computer-assisted strategic planning, President Waymon Armstrong said the company's time has arrived.

"In the military, the idea used to be bring troops to training. Now it's bring the training to the troops," Armstrong said.

The company's simulated training programs allow just that. Soldiers using broadband Internet connections can train together even though they are hundreds of miles apart. Armstrong said that the standard personal computers are now powerful enough to do the job that formerly required specialized training equipment.

Armstrong said his software is highly adaptable. Versions can be developed for all branches of the military, and it can be customized for homeland-defense training as well.

Russ Hauck, executive director of the National Center for Simulation, an Orlando-based group that represents simulation-equipment developers, said the military favors equipment that can be shared throughout the armed forces.

"The military is undergoing transformation," Hauck said. "One of the areas being emphasized is joint capability, where the branches of the military can work together."

Hauck said companies that look for the broadest application for their products will fare the best as the Pentagon retools.

But future Pentagon budgets are never certain, and the cost of replacing munitions used in Afghanistan and Iraq might leave less money for companies involved in research and development.

Paul Nisbet, a defense analyst with JSA Research Inc., Newport, R.I., said the Pentagon's 2004 budget should provide for replacement and R&D. He said the simulation industry, which is concentrated in Central Florida, should benefit.

"Simulation will continue to be strong," Nisbet said. "It is needed for the training of pilots and will certainly be needed in the development of new weapons."

Nisbet remains sanguine about the industry in general.

"This is the best time for defense contractors since the Reagan years," Nisbet said. "But we have a very weak commercial aerospace industry, and that is offsetting some of the gains that large defense contractors are making on the military side of their businesses."

That might hurt Boeing Co., which has suffered weak demand for commercial aircraft. But Lockheed Martin Corp., which is much more focused on military projects, shouldn't feel as much pain from an aerospace slump.

Nisbet also said that as the military reliance on high-tech weaponry increases, its need for sophisticated guidance and surveillance satellites will increase, benefiting the military space program.

"Space remains an important area, in part because of missile defense and military surveillance systems," Nisbet said. "We will continue to see heavy spending on space-related projects."

And Nisbet said the Defense Department will continue to lean on the big defense contractors -- Boeing, Lockheed and Northrop Grumman -- for its key needs. One of the three, Boeing, ran afoul of regulators and Congress over its business practices, raising questions about its fitness to compete for contracts.

One of the problems, involving Boeing's use of stolen Lockheed documents during the competition to build a new generation of heavy payload rockets in the late 1990s, resulted in a Pentagon censure. Another involved a proposed lease of refueling tankers to the Air Force, which congressional critics chastised as excessively lucrative for the contractor.

"The Boeing problems will disappear after a few months of groveling by Boeing management," Nisbet said. "A couple of years from now, you will have a hard time remembering that it all happened."